Capital Accounts, Valuations, Fees, Carry and What the Numbers Actually Say
Julian R. Sterling
These are the companion files of How to Read a Private Fund's Financial Statements by Julian R. Sterling.The book on Amazon →
Four Excel workbooks that go with the book, corrected where they were wrong: the complete reporting pack of
Appendix A with its twelve reconciliations live, the five cases of Appendix C, Appendix D as calculators, and the
ninety-minute reading sequence with the eighty questions. Around them: your own pack and the calculators with every input
emptied, thirteen working documents to print, forty questions that mark themselves, and three cases the book names and
never takes to a number. Every number is a live formula.
Free to download. No sign-up, no email address, nothing to fill in.
Ten workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 23 September 2026.
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Appendix A prints a complete pack for one fictional fund at one date, and says of it: every
figure is invented, and every figure also ties. This is that pack rebuilt so the ties are formulas.
Balance sheet, schedule of investments, operations, changes in net assets with both partner columns,
cash flows, the capital account issued to one investor, and the notes — then a reconciliations
sheet running the twelve checks the appendix lists, each returning “ties” or the amount it
is out by. Change Brackwell’s fair value from 61,200 to 55,000 and watch how much of the pack
moves, and which reconciliation stops tying. That failure is the sheet telling you a mark cannot be
edited in isolation. Revised: the appendix says three positions are below cost and there are two; the
column passes 100 per cent because of all the liabilities, the carry accrual first, not “simply the
borrowing”; and the markdown the appendix reads into the year cannot be read from the statements: the
rest of the portfolio was marked down only if the positions sold were carried below 35,500 at the
opening. The fee note’s 4,300 implies a base of 245,714, not the cost of 215,000: a question, now
with its arithmetic. Sixty-five figures checked against the appendix; sixty-four reproduce exactly.
Each case self-contained, its data as blue inputs and its solution as formulas. Case 1 is the
exit that looks like a write-down: a realised gain of 26,500,000 beside a negative change in
unrealised of 27,200,000, which decomposes into an exit that added 3,500,000 and a markdown of
4,200,000 elsewhere. Case 2 rebuilds a capital account that is deliberately not a clean
percentage of the fund and accounts for every unit of the 40,000 divergence. Case 3 recomputes a
reported 8.7 per cent and 1.28 times and finds, on the same data, 7.4 per cent and 1.23 times —
neither an error, both choices, both running the same way. Case 4 unlevers a subscription
facility: 654 basis points added to the reported rate, nine hundredths of a turn of multiple taken
out of investors’ pockets. Case 5 prices an accrued carry and shows why it cushions a fall.
Empty tools with one realistic example already in the blue cells. Rebuild your own capital account
from the fund’s aggregates and decompose the divergence from a flat percentage into named
economic events. Recompute your multiples and your rate on three dating and carry bases, and unlever a
subscription facility. Price the management fee on all four bases an agreement might use — the
same fund, the same year, a 62 per cent fall from one base change — then apply the offset with
its carried-forward credit. Run the hypothetical liquidation behind an accrued carry, with the check
that tells you whether the catch-up has cleared, and the clawback test with its tax limitation. Each
calculation carries the common error the appendix attaches to it, printed beside the formula. Revised:
the capital account sheet floored a fee discount at zero, so with a discounted investor it returned
11,760,000 where the answer is 11,840,000; your own fee is now an input from your own terms. A checks
sheet closes the workbook.
The reading sequence as nine timed steps — what to extract, the check to run, the trigger
that turns it into a question — built so that an interruption after forty minutes still leaves
you the forty that mattered, with a separate table for how the allocation shifts between a
fund’s early years, its middle years and its wind-down. Appendix B’s eighty questions
as a checklist, each with what a weak answer sounds like, and columns for the answer, the date and
last year’s answer, so that three weak answers in the same area become visible rather than
remembered. And the standing one-page summary: same fields, same order, one column a year.
Two workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Appendices A and D
Your own reporting pack, and the calculators
The Harbourgate pack with every input emptied: type your own fund’s schedule, statements, capital account and notes, and the twelve reconciliations run on them, with the threshold that tells you whether the rest of the portfolio was really marked down. And Appendix D’s calculators, empty, each block computing as soon as its own inputs are in.
The book’s figures are listed in a text file inside the archive. Type them back in and 277,450 of net assets and a capital account of 13,592,200 come back; type Appendix C’s Kettlewell case into the capital account sheet and it closes at 11,840,000 with the 40,000 divergence explained to the unit.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 1 to 20 · Appendices A to D
Thirteen working documents
The pack as received and the reading order. The statement of assets and liabilities with its checks. The schedule of investments position by position, with the multiple excluding the largest. Operations decomposed into the economic facts of the year. Changes in net assets and your share of the class. What funded the distributions, over four periods. Your capital account rebuilt with the divergence named. The commitment schedule with recallable amounts. Valuation: the note, the sensitivity reversed and the mark that did not move. The management fee recomputed. Carry and the expense schedule. Leverage and the ladder below the fund. And your return, the audit report and the standing one-page summary.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Seven on the statements, seven on your own position, six on valuation, seven on fees, carry, expenses, leverage and structures, seven on reading in practice and the appendices, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapters 4 and 20 · Appendix A · Case one
Marked down, or marked up?
Chapter 4 says to ask for the split of the unrealised line; Appendix A skips it and reads a markdown into Harbourgate’s year. The statements allow only a threshold: the positions sold cost 30,900, and unless they were carried below 35,500 the rest of the portfolio was marked up. With the administrator’s answer (ADDED, 47,000), the positions still held rose 11,500, and 107.6 per cent of the investor’s result of 523,900 is marks nobody has sold. Its balance rose 278,900; its return was 3.89 per cent, not 2.07.
Chapter 8 · Case two
The over-commitment ratio against the stressed path
The chapter’s investor, taken past the first year. Its 78,000 implies private marks down 10 per cent and an allocation of 34.6 per cent once the calls are paid. At the same call rate a second stressed year needs 3,600 more and there is nothing left: two years need 16,800 of liquidity, not 12,000. The chapter’s 34,000 of commitments is exactly the programme that survives one stressed year; for two, 24,286, a ratio of 1.21 instead of 1.70.
Chapter 16 · Case three
Seventy per cent of what?
The chapter’s joint venture with the promote it names, and its blocker with the tax as a function of value (ADDED figures that reproduce its ladder). The fund’s 70 per cent is worth 67.2, not 70, and it keeps 56 per cent of each unit of upside above the hurdle. A 10 per cent fall in gross assets costs 12.7 per cent of net assets, not 15.5, because the partner and the tax take part of it; the cushion stops once the joint venture has lost 12.5 per cent.
the last sheet of the first three workbooks, the blank set and every case: each control states its own verdict
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
Fund statements are in thousands and capital accounts in whole units, exactly as the book presents them.
On the checks sheets
One hundred and seven figures are checked against the book across the first two workbooks. One hundred and six reproduce
exactly. One differs in the last displayed digit: the appendix prints a 13.6 per cent uplift on the
Eastvale sale where the exact figure is 13.586.
Multiples are compared to six thousandths of a turn and rates to six hundredths of a basis point —
deliberately tighter than the book prints. Where Appendix C shows 0.47x the exact figure is 0.4667,
and where it shows 16.66 per cent the exact figure is 16.663; both are inside the band, and both are a
printing convention rather than a difference. Nothing is smoothed until it passes, because a check that
widens its own tolerance is not a check.
Go beyond the companion files
How to Read a Private Funds Financial Statements develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF prints on
A4 or US Letter. They use no macros
and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks to update links on
opening, decline — there are none.
The book these files come from
How to Read a Private Fund's Financial Statements by Julian R. Sterling. The workbooks reproduce the worked examples in the
chapters; the book is where the reasoning behind them is set out. It is not yet on sale —
these files are published ahead of it.
What changed, and when
23 Sep 2026
The workbooks corrected. Harbourgate: two positions below cost, not three; the column above 100 per cent is the liabilities, the carry accrual first; the markdown read into the year becomes a threshold (35,500) with a cell for the administrator’s answer; the fee note’s implied base (245,714) set against the cost of 215,000; thirteen checks added. Rebuild your own account: a fee discount was floored at zero (11,760,000 instead of 11,840,000 on the Kettlewell case). The Ninety-minutes question counter no longer counts its header. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases. Each workbook can now also be downloaded on its own.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
These files accompany How to Read a Private Fund's Financial Statements. The book is on Amazon.
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